Vietnam nears first trade surplus since 1992 after revisions

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Vietnam reported a trade surplus for the 11 months through November as exports of electronics and apparel weathered a global slowdown, putting the nation on course for its first annual surplus in two decades.

Exports exceeded imports by US$14 million in the January-to- November period after last month's trade balance was revised to a $156 million surplus from the $500 million deficit reported earlier. The country had a trade gap of $50 million in November, according to preliminary figures released by the General Statistics Office in Hanoi today.

Vietnam has failed to post a full-year trade surplus since 1992, with the deficit surging to $18 billion in 2008, or about 20 percent of gross domestic product, according to International Monetary Fund data.

The gap has narrowed as foreign investment in export sectors such as apparel and mobile phones increased, helping allay concerns about the currency and economic stability.

"The comparative advantage of cheap labor in Vietnam means it remains an attractive destination for foreign direct investment," said Dominic Mellor, a Hanoi-based economist at the Asian Development Bank. "Cheap labor will be able to sustain export growth in the near term, but further out Vietnam needs to maintain its competitive edge by investing efficiently in upskilling workers and improving infrastructure."

The Vietnamese dong gained 0.6 percent to 20,845 per dollar as of 1:52 p.m. local time today. The Ho Chi Minh City Stock Exchange's VN Index fell 0.3 percent.

Slowing growth 

Disbursed foreign direct investment in Vietnam in the January-to-November period was about $10 billion, unchanged from the same time a year ago, according to a posting on the government website today, citing the Foreign Investment Agency.

Vietnam is targeting growth of 5.2 percent for the full year, which would be the slowest pace since 1999. Still, its cost advantage has drawn investments from technology companies including Intel Corp., Samsung Electronics Co. and Jabil Circuit Inc., making mobile phones and electronics the biggest sources of export revenue this year.

Imports rose to $10.25 billion in November from a revised $10.17 billion in October, according to today's report. For the first 11 months of the year, purchases from abroad climbed 6.8 percent to $103.99 billion.

Exports fell to $10.2 billion in November from a revised $10.32 billion in October. For the first 11 months, shipments abroad rose 18.4 percent to $104 billion, the report showed.

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